Good Neighbors Credit Union

Personal Finance: What to Know About Money Market Accounts

Money market accounts are interest-bearing arrangements a person or institution can make with credit unions or banks. A big draw to this type of account is the higher interest rate compared to typical saving accounts. This type has both savings and checking features, and they come with a debit card and checks. 

Also, this kind of account doesn’t let you carry out more than a specific number of transactions monthly. These kinds of accounts used to have higher interest rates than savings accounts, but today they have similar rates. This kind of account has a higher minimum balance requirement, and they also have a greater minimum deposit amount. 

The Federal Deposit Insurance Corporation insures this kind of account at banks. Meanwhile, the National Credit Union Administration insures them at unions, ensuring that you don’t lose your deposits even if the bank goes out of business.

What makes a money market account different?

MMAs are not the same as money market funds. The former are bank accounts, while the latter is a type of investment vehicle whose performance is tied to the market. The FDIC or NCUA back MMAs for up to $250,000 per depositor.

Also, MMAs are not checking accounts. Although some of them have check-writing features and debit cards, you cannot have more than six “convenient” transfers or withdrawals a month. It means you are limited to six transactions, including debit card swipes, online transfers, and checks. If the ability to write checks and make frequent withdrawals is essential to your activities, an interest-bearing checking account is a better option.

Choosing a money market account

Before getting this kind of account, it’s good to look at the advantages and disadvantages that come with using it. Aside from the higher interest rates, one pro of using MMAs is the convenience. With it, you can make transfers between accounts, use a debit card, and write checks.

However, most MMAs have a high minimum deposit, and you could incur fees if your monthly balance dips past a certain point. If you decide that you want to use an MMA, make sure you get one with great rates, no monthly fees, and a reasonable minimum balance. In some institutions, there’s a clause stating you need to have at least $10,000 to access the best rates.

In all, you should choose an MMA if you want the safety of a credit union and would like to have a higher interest rate. If you need to write just a few checks a month and if you want ready access to your funds, it is also a good option.


Choosing where to keep your money is a significant decision, and it is one you should not make lightly. As a rule, consider how you will use your money, and how frequently you need access to your funds. If you’re keeping the money for expenses, store it in a checking account. However, if you want to grow your cash, you can store your money in an MMA. Talk to a financial expert to determine the best option in your circumstances.

At the Good Neighbors Credit Union, we believe in giving you the tools you need to set yourself up financially for life. We have the best money market accounts in Depew, NY, with unbeatable rates and APYs! Get in touch with us today for more information.

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